Here’s a trick question: How much will you have to pay for a new Chevy Volt, Nissan Leaf, Ford Fusion Energi, Tesla, or some other plug-in electrified vehicle?
If you live in the U.S., the answer is it all depends on the state in which you live and/or register the car.
Aside from a $2,500 to $7,500 federal tax credit depending on the vehicle’s battery size, people buying or leasing may also benefit from a menu of state incentives, most notably a cash rebate or tax credit, on top of the federal allotment.
State-level perks are made available under qualified terms to compensate for the extra expense associated with plug-in hybrid, battery electric, and in cases hydrogen fuel cell and other alternative fuel vehicles. Like your fuel mileage, state-offered dollar amounts do vary – from very generous down to zero.
Looking at a Chevy Volt (pictured top) as an example, the purchase amount before options could be as much as the $33,995 base selling price to as low as around $22,000 depending on where you live and your tax filing status. This is before any dealer discounts and other potential state or local perks, including additional financial benefits under state programs.
As a point of comparison, the best-selling Toyota Prius – ineligible for federal or state purchase incentives – starts at $25,035.
Why the variance for the plug-in? The discretion to offer these perks is up to the individual states, and you can see this in a couple of different ways. If you are eligible for a state rebate or credit, it’s tantamount to a windfall gain, though you will likely have forms to fill in, and typically will need to front the money you expect to get back.
If your state does not offer a meaningful financial green car incentive, while it would have been nice to receive, and may even feel unfair that your state offers nothing (or less than another state), bottom line is the state does not owe people free money.
Most states are willing to offer some form of monetary incentives, however, and their willingness to temporarily deprive the tax base is also to meet their goals of transitioning away from fossil fuels and toward cleaner air.
For the past half decade this has been the reality and the state-by-state incentives have been taken advantage of by many of the people who’ve purchased the almost half a million PEVs that are now on American roads.
Unlike the federal rules, the state-level perks are periodically reviewed, changed, and some programs have limits and finite funds, so it is better to investigate and if possible, get while the getting is good.
To give you an up-to-the minute update, with help from the National Conference of State Legislatures, and with data collected by the U.S. Alternative Fuel Data Center (AFDC), our list follows.
Notable is the country’s dominant PEV-consuming state, California, has for now suspended its alternative fuel vehicle rebate program putting applicants on a waiting list while budgetary issues are worked out. It would have made the list, but we’ll link its most-extensive list of benefits, many of which are still active. Similarly, Illinois’ state plan is also suspended, but its generous allotment would have ranked second.
States are ranked by maximum dollar amount for their alternative vehicle credit, but within each this may be less, depending on which qualifying vehicle you purchase, or other provisions of the individual programs.
7 Rhode Island – $2,500
Rhode Island is one of the “tri-state” region of New England states that are patterning off each other to put more PEVs on the road. Surveys have shown many residents are unaware of the existence of programs that could help offset their costs. Consider this your notice: FREE MONEY.
The state offers for its residents the Driving Rhode Island to Vehicle Electrification rebate program with rebates of up to $2,500 for the purchase or lease of qualified plug-in electrified vehicles.
6. Massachusetts – $2,500
Massachusetts is another of the “tri-state” states where advocates are working to see automakers send more cars, and to also get more dealers enthusiastic about stocking and selling them. To help, this state also is willing to help close the deal.
The Massachusetts Department of Energy Resources has a program called Massachusetts Offers Rebates for Electric Vehicles (MOR-EV) offering rebates of up to $2,500 to customers purchasing PEVs.
Massachusetts also has for local governments, public universities and colleges, and state agencies its Massachusetts Electric Vehicle Incentive Program (MassEVIP). Not for indiviual consumers, these do offer grants to purchase or lease qualified PEVs, zero emission electric motorcycles (ZEMs), and Level 2 EVSE. Up to $7,500 in grants is available to purchase or lease a PEV, up to $13,500 is available to purchase or lease a Level 2 EVSE, and up to $750 is offered to purchase or lease a ZEM.
5. Georgia – $2,500
During its best sales year of 2014, Nissan was reporting the Atlanta region as one where all of a sudden many residents decided the Leaf was a great idea. No, it wasn’t the TV ad where the polar bear hugged the Leaf buyer in his driveway that captured their attention, it was because of now-reduced perks that added to $5,000 or more which made the value proposition hard to resist.
The state still has a number of incentives, including an Alternative Fuel Vehicle Tax Credit for individuals who purchase or lease a new dedicated AFV or convert a vehicle to operate solely on alternative fuel. This tax credit is for up to 10 percent of the vehicle cost, or up to $2,500.
Potentially better than sweet tea is another income tax credit for charging the vehicle, called the Electric Vehicle Supply Equipment Tax Credit. This also provides up to 10 percent of the electric vehicle charging equipment, or up to $2,500.
4. Maryland – $3,000
Maryland is known for crab dishes, the Inner Harbor in Baltimore, the U.S. Naval Academy in Annapolis, among other things, and with up to $3,000 in PEV incentives, it can also be known as one of the better incentive-offering states in the country. The PEV incentive allotted by battery size is however adjusted so that cars like the largest battery plug-in hybrid Chevy Volt do not receive the maximum dollar amount (it’s eligible for $2,300). Other states do give their maximum credit for the Volt, as does the federal government, but in Maryland battery electric cars like the Nissan Leaf, BMW i3, others, and of course Teslas will get more of the incentive.
Diving into the details a bit, in addition to an HOV solo lane exemption for qualified alternative fueled vehicles the state offers a plug-in car tax credit. Effective July 1, 2014 through July 1, 2017, H.B. 1345 and S.B. 908 (2014) replace the existing tax credit of up to $1,000 with a tax credit equal to $125 times the number of kilowatt-hours of battery capacity of the vehicle, or up to $3,000. That just qualifies the 24-kWH Nissan Leaf for the whole enchilada (or whole crab cake, you choose).
Further, The Maryland Energy Administration (MEA) offers an income tax credit equal to 20 percent of the cost of qualified electric vehicle supply equipment (EVSE) – AKA charging equipment – that provides a 50-percent rebate for the EVSE plus installation costs.
Beyond this, the state offers an alternative fuel vehicle voucher program, alternative fuel infrastructure grants, an innovative transportation project competitive grant program, and this info is worth looking into via the AFDC site, or MEA site.
3. Louisiana – $3,000
The land of the Mardi Gras, Cajun, Creole, and other cultural uniqueness is also making its contribution to green energy with a tax credit of 10 percent of a new motor vehicle’s cost, up to $3,000.
This is an alternative to an income tax credit for 50 percent of the cost of converting or purchasing an alternative fuel vehicle or constructing an alternative fueling station.
Uncertain is the status at the moment. Latest available data said by January 31, 2016, the Louisiana House Committee on Ways and Means and Senate Committee on Revenue and Fiscal Affairs ws to review the credit’s economic benefit and make a recommendation by March 1, 2017, to extend or terminate the credit.
2. Connecticut – $3,000 Cash on the Hood!
In announcing its program, Connecticut stakeholders said they thought they could maybe teach California a lesson on how to do subsidies, which at the moment given California’s status, is all the more potent.
“We’re a small state, but we have some big ideas, and maybe we can show California how to do this,” said Jim Fleming, president of the Connecticut Automotive Retailers Association in August 2015 as they announced cash on the hood rebates. “It’s a bit of an experiment.”
Much more attractive than waiting for a check or tax credit is money at the point of sale taken directly off the sales price, and that is what Connecticut does. As the other “tri-state” mentioned, the exact amount varies by eligible car, and it will accommodate fuel cell vehicles if and when they get there, as has been planned.
Its Hydrogen and Electric Automobile Purchase Rebate Program (CHEAPR) provides up to $3,000 for purchase or lease of a hydrogen fuel cell electric vehicle (FCEV), or PEV on a first-come, first-served basis.
Registration fees are reduced also, and if you happen to live in New Haven, you are qualified for free parking with a qualified AFVs and HEVs registered there.
1. Colorado – $6,000
This state is the missing link to the Volt purchase example used up top for how to get a $34,995 Volt for approximately $22,000 as a Volt is eligible for around $4,500 in a program that goes as high as $6,000 for qualified vehicles. With a new twist on the meaning of Rocky Mountain high, residents eligible for the full $7,500 plus $6,000 in state credit will have to front the money when making the purchase, but stand to get it all back come tax time.
The state’s Alternative Fuel & Advanced Vehicle Technology Tax Credit provides up to $6,000 for a motor vehicle that uses or is converted to use an alternative fuel, is a hybrid electric vehicle or has its power source replaced with one that uses an alternative fuel.
Fleet buyers can also qualify for up to $8,260 per PEV under a program by The Colorado Energy Office (CEO) and Regional Air Quality Council (RAQC) which provides grants to support fleet PEV adoption.
Also supported for consumers are electric vehicle charging equipment grants, a solo driver HOV lane exemption, and what’s not to like?
At least 42 states offer some form of support for alternative fuel vehicles, and many of them have attractive programs that can seriously offset the expense of acquiring one.
Apart for the AFDC website, an excellent reference has been the National Conference of State Legislatures’ soup-to-nuts compendium all on one page put together by Energy Program Manager Kristy Hartman. Last updated December 2015, changes in state programs have taken place since then, and an updated page is expected soon.